Ministry Playbook for Corresponding Adjustments in Carbon Markets

This guide provides a structured approach for national governments to manage carbon finance effectively while meeting their Nationally Determined Contributions (NDCs) under the Paris Agreement. It outlines the complexities of corresponding adjustments (CAs) in carbon markets, emphasizing the importance of strategic decision-making regarding the issuance of carbon credits. The playbook addresses key considerations, including setting realistic NDCs, establishing marginal abatement cost curves, and assessing the financial implications of authorizing CAs. It also discusses the necessity of understanding breakeven pricing for both voluntary carbon markets (VCM) and CA credits, ensuring that governments can recover costs and maintain program sustainability. Additionally, the playbook encourages the development of a sales strategy that balances economic returns with the need to achieve climate commitments. Overall, this document serves as a comprehensive resource for governments navigating the intricacies of carbon finance and compliance with international climate agreements.